Uber Will Cut Down On Costs, Treat Hiring As A ¡®Privilege¡¯, Says CEO

Uber will cut back on spending and focus on becoming a leaner business to address a ¡°seismic shift¡± in investor sentiment, CEO Dara Khosrowshahi told employees in an email, as per CNBC.

To address the shift in economic sentiment, Uber will slash spending on marketing and incentives and treat hiring as a ¡°privilege,¡± CEO said.

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¡°After earnings, I spent several days meeting investors in New York and Boston,¡± the Uber CEO said in an email, which was sent out late Sunday. ¡°It¡¯s clear that the market is experiencing a seismic shift and we need to react accordingly.¡±

He added ¡°We have to make sure our unit economics work before we go big. The least efficient marketing and incentive spend will be pulled back.¡±

¡°We will treat hiring as a privilege and be deliberate about when and where we add headcount,¡± CEO Dara said.

This mail by the Uber CEO makes it the latest tech company to warn of a slowdown in hiring. Facebook parent company Meta last week told staff it would stop or slow the pace of adding mid-level or senior roles, as per a CNBC report.

Following this announcement, Uber shares ended at more than 11% down on Monday. The stock, which hit a new 52-week low earlier in the session, has fallen more than 45% year to date.

Focus On Profitability

Reuters

The Uber CEO also said the company will now focus on achieving profitability on a free cash flow basis rather than adjusted earnings before interest, taxes, depreciation, and amortization.

¡°We have made a ton of progress in terms of profitability, setting a target for $5 billion in Adjusted EBITDA in 2024, but the goalposts have changed,¡± CEO Khosrowshahi said. ¡°Now it¡¯s about free cash flow. We can (and should) get there fast.¡±

Uber¡¯s revenue more than doubled to $6.9 billion in the first quarter, as demand for its rides business rebounded thanks to a relaxing of Covid restrictions. The company has relied heavily on its Eats food delivery unit to boost sales during the pandemic.

Uber CEO said, ¡°We are serving multi-trillion-dollar markets, but market size is irrelevant if it doesn¡¯t translate into profit.¡±

As per CNBC, He ended the email with a rallying call to staff: ¡°let¡¯s make it legendary. GO GET IT!¡±

Also Read: How This Cancer Survivor Built A Rs 150-crore Uber-Like Aviation Company

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